Senate OKs $15,000 Tax Break For Homeowners

Senate OKs $15,000 Tax Break For Homeowners

The Senate voted Wednesday night to give a tax break of up to $15,000 to homebuyers in hopes of revitalizing the housing industry. The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.

Democrats readily agreed to the proposal, although it may be changed or even deleted as the stimulus measure makes its way through Congress over the next 10 days or so.

Here is what we know so far:

Amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less

Purchases must be made within one year of the legislation's enactment

The tax credit would not have to be repaid

The amendment would allow taxpayers to claim the credit on their 2008 income tax return

Only purchases of a principal residence

Recapturing the credit if the home is sold within two years of purchase

Would sunset the current $7,500 housing tax credit on the date of enactment.

This is a bright spot in the real estate industry. We'll keep you posted as we find out more information on this exciting news.